FINANCE CHEAT SHEET
by
Nicolas
Boucher
ACCOUNTING KPIS
FINANCE ORGANIZATION CHART
FP&A METHODS AND SKILLS CHART
HEADCOUNT KPIS
ACCOUNTS RECEIVABLE TURNOVER
HEADCOUNT
Net Credit Sales / Average Accounts
Receivable
Number of active employees full time &
part time + leasing employees
ACCOUNTS PAYABLE TURNOVER
FULL TIME EQUIVALENT (FTE)
Total Supplier Purchases / Average
Accounts Payable
Number of hours in the employee
contract / Standard working hours
WORKING CAPITAL RATIO
TURNOVER RATE
Current Assets / Current Liabilities
DEBT-TO-EQUITY RATIO
Number of departure over a period /
Average total headcount
Total Debt / Total Equity
NATURAL ATTRITION
GROSS PROFIT MARGIN
Planned retirement + Planned end of
limited contract
(Revenue - Cost of Goods Sold) / Revenue
CAPACITY
NET PROFIT MARGIN
Number of FTEs over a period x working
hours available for one FTE
Net Income / Revenue
RETURN ON ASSETS (ROA)
CAPACITY INCREASE FLEXIBILITY
Net Income / Total Assets
Flexible time account not used + Overtime
+ Temporary change of hours available in
part-time contracts
RETURN ON EQUITY (ROE)
Net Income / Total Equity
INVENTORY TURNOVER
CAPACITY DECREASE FLEXIBILITY
Cost of Goods Sold / Average Inventory
Flexible time account + Temporary
change of hours available in part-time
contracts + Temporary workers time
FIXED ASSET TURNOVER
Revenue / Net Fixed Assets
CASH KPIS
FINANCIAL TERMS EXPLAINED TO NON-FINANCE PEOPLE
REVENUE
CASH BURN RATE
Cash Spent (monthly average) - Cash
Received (monthly average)
AVERAGE DAYS DELINQUENT (ADD)
Days Sales Outstanding (DSO) - Best
Possible Days Sales Outstanding (BPDSO)
ASSETS
PROFIT
The total amount
of money coming
into your business
The money you have left
over after you subtract
your expenses from
your income
EXPENSES
Net Income + Non-Cash Expenses –
Increase in Working Capital
OCF + Interest Payments - Asset Purchase
OVERDUES RATIO
Money you spend
on things you need
to run your business
LOSS
When your
expenses are more
than your income
(New hires salary costs - Leavers salary
costs) / Previous salary costs
ABSENTEEISM
Illness days / Total working days
BALANCE SHEET
Things you own
that have value
It shows how mucha
company has, how much it
owes and how much is left
for the owner of the
company
OPERATING CASH FLOW (OCF)
FREE CASH FLOW (FCF)
NORIA EFFECT
LIABILITIES
INCOME STATEMENT
Money you owe
to others
It shows how much money
the company made and
how much it spent
CASH FLOW
STATEMENT
Shows where the
company's cash
came from and
where it went
Average Account Receivables / Annual
Sales x 365 days
CYCLE TIME
Process time + Inspection time + Move
time + Queue time
DAYS PAYABLES OUTSTANDING (DPO)
Average Account Payables / Yearly Cost Of
Goods Solds (COGS) x 365 days
CASH CONVERSION CYCLE (CCC)
DIO+DSO−DPO
CASH RESERVES IN DAYS
Cash Reserves / Average Daily Expenses
BALANCE SHEET KPIS
CURRENT RATIO
Current Assets / Current Liabilities
QUICK RATIO
(Current Assets - Inventory) / Current
Liabilities
DEBT-TO-EQUITY RATIO
Total Liabilities / Shareholders' Equity
DEBT RATIO
Total Liabilities / Total Assets
INTEREST COVERAGE RATIO
Earnings Before Interest and Taxes (EBIT) /
Interest Expenses
RETURN ON ASSETS (ROA)
Net Income / Total Assets
RETURN ON EQUITY (ROE)
Net Income / Shareholders' Equity
-10%
Gain control of
"miscellaneous"
spending
-20%
Reduced
business
requirements
-30%
Restructure or cut
cross-department
activities
Reduce expenses
specific to each
department
INVENTORY TURNOVER
Goods
sold
Payment from
client
BUDGET PROCESS
OVERALL EQUIPMENT
EFFECTIVENESS
Good Count × Ideal Cycle Time / Planned
Production Time
Cash Conversion Cycle (CCC)
HOURLY
RATE
ON TIME DELIVERY
On time units / Total units
=
AVOIDED COSTS
COSTS
HOURS
Direct Labor Costs & Costs
allocated to hourly rate
Available hours, less holidays, less
sickness, less non-productive hours
VALUATION TECHNIQUES
INVENTORY TURNOVER
Price
Volume
WORKING CAPITAL
Current Assets - Current Liabilities
Effect of
price
keeping
quantity
constans
SAAS KPIS
Selling more
products, even
at the same
mix and price
will increase
sales
Mix
Even keeping
total
quantities and
prices the
same, sales
can increase
of we sell a
higher
proportion of
expensive
products
Comparable Analysis
Comparable Company Ratio x
Company Financial Ratio
DCF
CUSTOMER CHURN RATE
(New buyers this month - New buyers last
month) / New buyers last month
RUNWAY
Current Cash Balance / Burn Rate
AVERAGE REVENUE PER USER (ARPU)
CAPEX KPIS
REVENUE GROWTH
CUSTOMER ACQUISITION COST (CAC)
COMMITMENTS
INTERNAL RATE OF RETURN (IRR)
(Current period revenue - Previous period
revenue) / Previous period revenue
Total Marketing and Sales Costs / Number of New
Customers Acquired
(Future Value / Present Value) ^ [(1 /
Number of Periods) – 1]
(New MRRt + Expansion MRRt) / (Churned
MRRt + Contraction MRRt)
TOTAL ADDRESSABLE MARKET (TAM)
Annual Contract Value per client *
Number of potential clients
GROSS PROFIT MARGIN
CUSTOMER LIFETIME VALUE (CLV)
(Revenue - Cost of Goods Sold) / Revenue
(Average Annual Revenue per Customer x Average
Customer Lifespan) - Customer Acquisition Cost
NET PRESENT VALUE (NPV)
NET PROFIT MARGIN
RETURN ON ASSETS (ROA)
Net Cash Flows / [(1 + discount rate) ^
Number of periods]
RETURN ON INVESTMENT (ROI)
(Gain from investment - Cost of
investment) / Cost of investment
Revenue / Fixed Assets
Net Income / Fixed Assets
DEPRECIATION
RETURN ON INVESTMENT (ROI)
Acquisition / Useful Life
Net Income / Total Investment
UTILIZATION
Actual Production / Maximum Production
x 100%
(Net Income / Revenue) x 100
EARNINGS PER SHARE (EPS)
(Net Income - Preferred Dividends) /
Average Outstanding Shares
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DAYS ON HAND
Days of inventory on hand = (Average inventory
for period / Cost of sales for period) x 365
STOCK TO SALES RATIO
Stock to sales ratio = Inventory value /
Sales value
COST OF CARRY
(Inventory Service Costs + Inventory Risk Costs +
Capital Cost + Storage Cost) / Total Inventory Value
BACKORDER RATE
Backorder rate = (Number of Undeliverable Orders
/ Total Number of Orders)
SELL-THROUGH RATE
Number of units sold / Number of units
received
SCRAP RATE
Scrap expenses over the period / Average
inventory over the period
TIME TO RECEIVE
Time for stock validation + Time to add stock to
records + Time to prep stock for storage
INVENTORY SHRINKAGE
Amount of unsellable stock in period /
Amount of available stock in period
Total Investment / Annual Cash Flow
Future Purchase Contracts
Average inventory = (Beginning inventory +
Ending inventory) / 2
DEAD STOCK
PAYBACK PERIOD
ASSET TURNOVER
Number of customers * Average billed
amount
CEO KPIS
Purchase Cost + Direct Costs
Total revenue / Total number of customers
INVENTORY KPIS
Ending inventory value – Physically
counted inventory value
ACQUISITION
SAAS QUICK RATIO
MONTHLY RECURRING REVENUE MRR
Market Value of Assets - Liabilities
Transaction Price x Transaction
Multiples
Customer Value * Average Customer
Lifespan
Cash Spent - Cash received
Asset-Based Valuation
Precedent Transactions
LIFETIME VALUE
NET BURN RATE
Σ(Cash Flows / (1+r)^t)
Assets - Liabilities
NEW BUYER GROWTH RATE
Cost of Sales and Marketing / Number of
New Customers Acquired
Discounted Cash Flow
Liquidation Valuation
Customers lost / Total Customers
CUSTOMER ACQUISITION COSTS
Assumed Repair Cost + Production Losses
– Preventative Maintenance Cost
AVERAGE INVENTORY
PVM ANALYSIS
Revenue / Average Accounts Receivable
Net Income / Average Total Assets
Number of production orders started /
Number of good products finished
Days Sales Receivable (DSO)
Shift the burden
to the most
efficient location
ACCOUNTS RECEIVABLE TURNOVER
RETURN ON ASSETS (ROA)
YIELD FACTOR
Days Payable (DPO)
Eliminate liaisons
and coordinators
Cost of Goods Sold / Average Inventory
Cost of Goods Sold / Average Inventory
(over period of time)
Number of good products finished /
Number of production orders started
(expressed in percentage)
Days Inventory (DIO)
REVAMP IDEAS
Eliminate
programs
Production available time / Customer
demand
FIRST PAST YIELD
REDESIGN IDEAS
Automate
processes
Payment to
supplier
Reception of
Inventory
INCREMENTAL IDEAS
Reduce
consulting
services
TAKT TIME
CASH CONVERSION CYCLE
HOW TO REDUCE COSTS ?
MANUFACTURING KPIS
Sum of monetary value of all finished
goods produced within a defined period
DAYS OF INVENTORY OUTSTANDING
DAYS SALES OUTSTANDING (DSO)
Average number of days between job
opening & contract signed by candidate
PRODUCTION ACTIVITY
Overdues / Total Receivables
Average Inventory / Yearly Cost Of Goods
Solds (COGS) x 365 days
TIME TO FILL
EMPLOYEE ENGAGEMENT
Measures the level of employee satisfaction
and commitment to the company
EMPLOYEE TURNOVER
(# of Employees who left during the period /
Average # of Employees during the period) x 100
CASH FLOW
Operating Cash Flow + Investing Cash Flow +
Financing Cash Flow
CREDITS TO
Nicolas
Boucher
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